WIN-WIN

by David Goldwich

  If your counterpart clams up on you, don’t give anything away. Repeat your last comment, ask her what she thinks about it, read through your papers, stare her in the eyes, or excuse yourself to make a phone call or use the restroom. Do anything to break the dynamic without conceding anything more. Just make sure you don’t break into nervous giggles.

  BUNDLING

  You walk into a fast food restaurant for lunch. You order a burger and a medium drink. Then you notice that you can get the same burger and drink with fries for just a bit more. It seems like such a bargain. When you stop eating and stare at the remaining piece of burger and fries that you can’t finish, you wonder why you ordered so much food. You’ve been bundled!

  Sellers often bundle a set of related items at a special price to entice you to spend more. Sometimes it is a bargain, like when you really do want a burger, drink, and fries. Often, it is just a tactic to separate you from your money.

  To counter the bundling tactic, focus on your interests. Determine which items in the bundle you want and which you do not want. Negotiate for a package that includes only what you want. Do not be swayed by a package of unnecessary extras just because it looks like a good deal.

  HANDLING A TOUGH NEGOTIATOR

  With all the lip service being paid to negotiating win-win outcomes in recent years, it is still not easy to get one. While we do see more of the collaborative style of negotiating that makes a win-win more likely, we often encounter a difficult or tough negotiator. How can we handle him and still get a good deal?

  When facing a tough negotiator, you must first try to understand why she is being so difficult. Is she testing you? Is she playing hardball as a tactic? Is she in a bad mood (temper)? Or is she difficult by nature (temperament)? Once you identify the motive driving the difficult behavior, you can deal with it successfully.

  Test

  Some negotiators come on strong to see how you will react. They are hoping to intimidate you into giving up more than you would like. You need to hold your ground. If you stand up to them, you have passed the test and they will respect you. They may even tone it down a bit.

  Tactic

  Sometimes, the hard negotiator is being tough as a tactic. Even if you stand up to him, he will continue to push hard. He has learned through experience that he can often get a better outcome when he is more demanding, so he will try to wear you down. If this is his game, you must brace yourself and focus on what you want to get out of the deal.

  The worst thing you can do with a tough negotiator is offer concessions in a misguided effort to appease him. You may be thinking that if you give in a little, he will appreciate it and ease up. But the message he will receive is that by being tough he is getting more, so he will continue to use the tactic—you have proven that it works! Each time your hard bargaining counterpart asks you for a concession, ask him for something in return. For example, you could say “I am willing to give you X if you will give me Y.” Make him understand that there will be no free lunch.

  Tests and tactics are rational behaviors. They are often employed by competitive style negotiators. Some negotiators, however, are difficult because of emotions.

  Temper

  Your negotiating counterpart may just be having a bad day. As a result, she may be hostile, irritable, or otherwise difficult to deal with. We have all had a bad day and let it affect the way we treat others.

  If your counterpart is mistreating you because she seems upset about something, this could be a good time to ask the magic question: “Did I do anything to offend you?” If the answer is yes, you can ask what you did that caused offense, apologize for it, and continue to negotiate calmly. If the answer is no, it will become obvious to her that she has no reason to vent her anger at you and she will most likely calm down.

  Temperament

  There are a few people who simply do not play well with others. They may be arrogant, demeaning, unpleasant by nature, or just plain obnoxious. They are not testing you, playing hardball as a tactic, or just having a bad day—they are bullies. Perhaps your counterpart is abusive and enjoys wielding his power. You will not change him, but do not stoop to his level either. Take the high road and do your best. Be polite and professional. Stay focused on your objectives and work towards an agreement that satisfies him while meeting your own needs. A bully may not begrudge you your win as long as he gets what he wants.

  The tough negotiator is a challenge in doing business. Rise to the challenge by understanding the reason for the behavior and addressing it.

  * From the work of Amos Tversky and Daniel Kahneman, discussed in Deepak Malhotra, “Four Strategies for Making Concessions,” https://hbswk.hbs.edu/item/four-strategies-for-making-concessions, in Harvard Business School Working Knowledge, March 6, 2006.

  * Described in detail by Robert B. Cialdini, Influence: The Psychology of Persuasion (1984).

  CHAPTER 8

  WRAPPING UP: CLOSING, IMPLEMENTATION, AND POST-NEGOTIATION MATTERS

  “It ain’t over ‘til it’s over.”

  —Yogi Berra

  You’ve done your homework, asked questions and gathered information, identified interests and currencies, developed a Plan B, created value and options, and finally reached an agreement with your counterpart. You shake hands and congratulate one another on a job well done. Now what?

  You feel relieved, exhilarated even. You look forward to enjoying the fruits of your efforts. Perhaps you feel so good that you don’t even think about how those fruits will end up on your table.

  Shaking hands over your agreement is not the end of the negotiation. Agreements don’t implement themselves. There is still more to do!

  ULTIMATUMS

  Many negotiations end—with or without an agreement— after an ultimatum is issued. An ultimatum is a demand that something be done by a certain deadline, with a punishment for non-compliance. It is a threat that may or may not be believed by the recipient, and may or may not be carried out by the issuer. An ultimatum will often be delivered in a “Take it or leave it” or “Do it or else” form.

  There are four ways in which an ultimatum can play out:

  1. Successful bluff

  The issuer doesn’t mean it, but the recipient believes it. The issuer got lucky.

  2. Failed bluff

  The issuer doesn’t mean it, and the recipient doesn’t believe it. The issuer loses credibility.

  3. Successful ultimatum

  The issuer means it, and the recipient believes it and concedes. The issuer gets his way without having to carry out his threat.

  4. Failed ultimatum

  The issuer means it, but the recipient doesn’t believe it. The issuer must follow through with the threat or risk losing credibility.

  This is a risky gambit. The result will depend in part on the resolve of the issuer and in part on whether the recipient believes the threat will be carried out. The issuer may be more or less convincing, but he cannot be sure how the recipient will respond.

  When you say, “That’s my final offer” or “Take it or leave it,” you put yourself into a corner. If you follow through with your ultimatum, you may lose a deal you wanted. If you don’t follow through, you lose credibility. Either way, you offend the other party. As credibility is so important and you cannot control how the other party may respond, you are better off not issuing an ultimatum unless you are fully prepared to follow through with it. Bluffing is risky!

  If you must issue an ultimatum, make it a gentle one rather than a harsh one. “Take it or leave it” is abrupt and insensitive to the other party. He will be offended. You can convey the same either/or message in a much nicer way. For example, “It’s the best I can do; work with me.” This does not sound like an ultimatum; it sounds like a plea for help. The recipient will not be offended, and may even be sympathetic.

  Give your ultimatum with a less desirable alternative, so your counterpart can choose. For example, “I know you could probably get your asking price eventually, but this i
s all we have in our budget.” Notice you are still giving an ultimatum: take it (this is the best we can do) or leave it (you can try to get your price elsewhere), but it doesn’t sound like an ultimatum. The recipient might not want to wait for a better offer, so your gentle ultimatum sounds like the better choice.

  What should you do if your counterpart issues you an ultimatum? You have a few options:

  • Offer a partial agreement on some terms and try to negotiate further on the others.

  • Make a counter-offer. It is rarely either A (take it) or B (leave it). Offer them a new option C-–they might accept.

  • Ignore it and continue talking. Discuss other matters as a diversion and then come back to the negotiation: “Now, where were we? I believe your last offer was …” Or suggest they think about it and get back to you later. This reduces the pressure to follow through on their threat to maintain credibility and allows them a face-saving way to back down. The time buffer allows them to “forget” they issued an ultimatum. The more time that passes, the less likely they will follow through with their threat.

  • Walk away (leave it), but be civil. Circumstances change, and you may find yourself back at the negotiating table with them later. Or you may exercise your Plan B.

  DEALING WITH AN IMPASSE

  You will frequently reach a point in a negotiation where you get stuck. Neither side wants to budge, progress is halted, and frustration mounts. You may wonder whether you will ever reach agreement. What can you do when you reach an impasse? Here are some suggestions:

  1. Most progress in a negotiation usually occurs in the final stages. Recognize that an impasse is common and does not signal failure. Accept it as a hurdle that can and will be overcome.

  2. Focus on your interests, and help your counterpart to focus on his. It is natural to get distracted by minor issues in the heat of bargaining. Refocusing on interests and priorities can get the negotiation back on track.

  3. Look for creative ways to add value. Explore options that have been overlooked. As a negotiation proceeds, you learn new information that can lead you to other possible solutions.

  4. Offer to grant a small concession, but demand one in return. A small movement can get things rolling again.

  5. Focus the negotiation on smaller or easier items. As you reach agreement on some minor points, you build momentum that can carry you forward.

  6. Change the dynamics of the negotiation. A change in players and personalities can jumpstart a stalled negotiation.

  7. You might also change the environment. Different surroundings can change the atmosphere and put you back on track.

  8. Take a time out. Review your strategy and allow emotions to cool down. Sometimes, taking a break to relax and clear your head can work wonders.

  9. Agree to impose a period of silence. This is not the same as taking a break. Everyone stays in the room, they just don’t say a word for five or ten minutes. During this time, all kinds of thoughts creep into our minds, causing both sides to moderate their expectations.

  10. You could also impose a deadline. In many negotiations, most of the progress is made in the final stages, as the deadline approaches. Sometimes, time pressure is just the kick in the pants the parties need to get things moving again.

  11. Ask your counterpart for his agreement. Sometimes it is just as simple as asking. If he says yes, great! If he says no, ask why not? Listen carefully to his answer, address his concerns, and set forth the remaining steps needed to conclude an agreement.

  12. If things seem hopeless, consider bringing in an impartial third party. More often than not, a good mediator can help the parties to reach an agreement.

  13. Finally, be prepared to walk away if necessary. Just be sure you are not bluffing, and that you have someplace to walk away to. This takes guts, but it may apply pressure on the other side to be more flexible.

  An impasse need not be the end of the line. Be persistent and you can put the negotiation back on track.

  MEMORANDA AND DRAFT AGREEMENTS

  It’s important to take careful notes throughout the negotiation. Whether you are meeting face to face or negotiating over the phone, take notes. You’d be surprised how often you and your counterpart forget things, or have different recollections of things discussed. Your notes will come to the rescue. You may even find that what you and the other party actually agreed to is more favorable to you than what you recalled.

  People forget things. Even with the best of intentions, we cannot remember everything. Taking notes makes you more attentive to the negotiation, which is reason enough for taking notes, but it is also a good idea to protect yourself at every stage of the process. If the negotiation is complicated or takes place over a long period of time, draft a memorandum from your notes periodically to reflect the current state of affairs. In any event, you will certainly want a final memorandum at the end of the negotiation. This memorandum may even be the basis for what will become a formal written agreement.

  I suggest that you draft any written contract yourself. Your counterpart may genuinely appreciate that you have taken responsibility for this, although that is not the main reason for doing it. You and your counterpart will inevitably have different understandings about what you are agreeing to, and you will prefer to make your understanding the basis of the final agreement. As you draft the contract, you will naturally shape it according to your understanding. This does not mean you have devious motives; you probably won’t even be aware of it. Chances are your counterpart won’t be aware of it either.

  Some negotiators like to draft an agreement before they even begin negotiating! This may sound premature, but the idea has merit. It forces you to think about what you really want to get out of the negotiation. It also gives you a chance to set high aspirations. While the final agreement will probably look different than what you conceived earlier, your first draft gives you something to measure the final agreement against. Compare the proposed final agreement with this earlier draft before you finalize it to make sure you didn’t overlook anything important.

  Your counterpart may also wish to write the contract. If so, read it over carefully. Make sure it conforms to your understanding as reflected in your notes. If anything seems amiss, raise the issue with the other party immediately.

  As you haggle over the final terms you may have a series of revisions to make or approve. Do not focus only on the red pencilled changes when comparing drafts. Check all subsequent revisions as carefully as the first draft.

  Lawyers spend an inordinate amount of time and charge hefty fees for poring over contracts. It is often worth the extra time and expense.

  IMPLEMENTING THE AGREEMENT

  Have you ever made plans to meet a friend, only to find that the meeting never takes place?

  “Where were you? You were supposed to meet me last night!”

  “No, we discussed it, but you never called back to confirm it.”

  “But I thought we had agreed to meet. I didn’t think we needed to reconfirm.”

  It seemed like a simple enough plan at the time, but the two of you had different understandings.

  Agreements don’t implement themselves. People implement agreements and people sometimes misunderstand, forget, or fail to follow through.

  Any written contract should make clear the who, what, when, where, and how of the agreement. If there is only an oral agreement, your notes or memos should reflect the parties’ understanding. Follow up to make sure both parties are doing what they agreed to do.

  Remember the two sisters who squabbled over the orange? They eventually discovered that one wanted to squeeze out the juice, while the other wanted to grate the rind to make a cake. The solution sounds simple enough in theory, but it may not be so simple to execute. Will the thirsty one squeeze out the juice first, and give her sister a messy peel afterwards? Or will the baker grate the rind first, and give her sister a nearly naked and hard to squeeze fruit? When do they each plan on using the parts they need? While t
hey may think their problem was solved, their troubles may not be over yet!

  I mentioned earlier that it is wise to draft an agreement before you begin negotiating. At the very least, ask yourself: what will the final agreement look like? Continue to think about this over the course of the negotiations. Ask yourself:

  • What steps must be taken? By whom? By when?

  • What possible obstacles might arise? Potential misunderstandings? How might you avoid them?

  • How can you help your counterpart “sell” the agreement to his constituents?

  • How will the agreement be monitored?

  At the end of the formal negotiation, after the final handshake, you will want to celebrate and stop thinking about all the details of the agreement. As time goes by, these details become a blur. You move on to other projects. You assume the deal will happen as planned.

  To avoid problems later, make sure the final agreement provides detailed answers to the questions above. At the very least, assign the follow-up work to a particular person who will be held accountable, such as your personal assistant. Provide a clear framework for implementing the agreement.

  NIBBLES

  A nibble is a last-minute attempt by one party to grab an extra concession from his counterpart. For example, a car buyer might ask the salesman to throw in a set of new floor mats, or a home buyer might ask the seller to include certain appliances not already included in the contract.

  A nibble is a consciously employed tactic, not the afterthought it seems to be. The nibbler knows the other party may be feeling generous while basking in the afterglow of a successful negotiation, and he tries to take advantage of this goodwill. Or perhaps the party being nibbled may fear the deal will fall through if he doesn’t agree to this relatively minor request. Not wishing to appear petty, he agrees.